Wesfarmers boss Richard Goyder managed to keep his shareholders happy with several treats, including a $1 per share capital distribution, a special 10¢ per share dividend (in addition to the ordinary dividend) and some strong performances within the company’s stable of assets – particularly Bunnings and the group’s engine room, Coles.

The market’s appreciation can be measured by the 1.6 per cent immediate gain in the share price on the back of the announcement and an ultimate gain on the day of 3.77 per cent .

Wesfarmers’ shareholder generosity was enabled by the sale of its insurance business for a good price – a move which provides a reminder that buying assets well, improving their performance and selling them for a profit is a major part of this conglomerate’s DNA.

But the positive public relations from this performance was hijacked by Reserve Bank governor Glenn Stevens and Australian Competition and Consumer Commission chairman Rod Sims, both of whom took indirect yet unrelated swipes at the company.

Stevens told the House of Representatives Standing Committee on Economics that companies’ focus on returning cash to shareholders might be shifting much needed focus away from investment-productive assets.

Stevens describes a lack in what he has dubbed ''animal spirits'' in the business community, which he reckons is due to caution about the level of demand.

The comments were not particularly targeted at Wesfarmers. Indeed, it was unfortunate timing for Goyder, who is only one of many business chiefs to announce shareholder-friendly capital management initiatives over the past few weeks. Others include Telstra and Rio Tinto. And there are a string of other companies that have just increased their dividend payout ratios. Anecdotal it may be, but Stevens is correct in that there is a clear theme emerging.

The flip side is that companies with strong cash reserves which don’t get on board the capital management train get clobbered by their shareholders. One need look no further than BHP Billiton, which eschewed traditional capital management moves this week and opted for a demerger. Its share price was belted in response.

The Stevens comments left Goyder in the uncomfortable position of needing to argue that his company was still investing in growing its store numbers and looking for acquisitions, yet to justify being prudent in its choice of potential acquisition targets. He said one can make a lot of potential acquisitions look cheap in the early years which in the longer term won’t stack up.

He also noted that a company can get earnings per share accretive acquisitions by gearing up a balance sheet and using very cheap debt, but said Wesfarmers never assumes debt will remain cheap.

(Having said that, Wesfarmers’ initial plans to buy Coles before the global financial crisis did involve, in part, the use of cheap debt.)

Meanwhile, Goyder was also sideswiped on Wednesday by the ACCC announcing it had instituted proceedings in the Federal Court against a petrol pricing comparison website, Informed Sources, and a group of petrol retailers including Coles and Woolworths. The ACCC alleges the sharing of price information could substantially lessen competition.

Despite these distractions, most investors were keenly focused on Coles supermarkets, its returns and its comparison with Woolworths. The result was in line with market expectations.

Despite a mixed environment for retail and an increasingly competitive landscape, Coles experienced accelerating sales growth in its final quarter and grew earnings before interest and tax in the full year by 9.1 per cent. Much of the performance improvement was driven by investment in lowering the price of supermarket goods. Price ''deflation'' was 1 per cent in the fourth quarter and 1.3 per cent for the year.

The Coles result presents Woolworths with a significant challenge. Its success in meeting it will be known when it reports its result later in the month.

Bunnings was the other standout performer, despite being faced with additional competition from Woolworths-owned Masters. Sales growth from Bunnings for the year improved 11.7 per cent, with store-on-store sales growing 8.4 per cent for the year and 10.3 per cent in the fourth quarter.

Against this, Masters losses have grown as it continues its store rollout.

While Bunnings experienced a slight easing in its margin, its overall performance was particularly strong, with earnings up 8.3 per cent and return on capital just under 30 per cent.

Officeworks and Kmart also made good contributions to Wesfarmers retail operations.

The only real disappointment among Wesfarmers’ retail brands continues to be Target, whose performance and returns again disappointed despite several years of intense treatment by different managements.

Target’s return on capital of 2.9 per cent compares with 26.9 per cent for Kmart.

The good news is that as other businesses grow, its effect on overall group performance is less important and shareholders will give Goyder the latitude to keep working on a structural/operational remedy.